TMI Blog1965 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the court was delivered by SIKRI J.---These two appeals pursuant to a certificate granted by the High Court of Mysore under section 66A(2) of the Income-tax Act are directed against the judgment of the High Court answering the question referred to it in favour of the respondent-assessee. The question referred to is : " Whether the assessee, Messrs. Shah Jethaji Phulchand, can be granted registration under section 26A of the Indian Income-tax Act on the basis of the deed made on November 20, 1950, for the assessment year 1953-54 and/or 1954-55 ?" The relevant facts are these. The respondent, M/s. Shah Jethaji Phulchand, hereinafter called " the assessee ", is a firm constituted by a partnership deed dated November 20, 1950. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be at liberty to carry on cotton business or any other business in their individual capacity with different capital without the consent of other parties. The partners doing business in their individual capacity need not disclose their profits of the individual business to the other partners of this partnership. (4) That this partnership shall have effect from Deepavali 1950 as previously agreed and as the same has already been working as such with effect from that date and the same shall be in existence for such periods as the parties desire. The partnership shall be terminated at the will of any of the partners. (5) That the partners shall have a right to borrow any money required for partnership business at prevailing rate of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor can enter into a contract for partnership either by himself or through a guardian. " For the assessment year 1954-55, he held that although the minor was not liable for loss but he was described as a partner and was vested with all the rights relating to the conduct of business along with the other partners and was thus treated as a full-fledged partner. He held that the contract of partnership was void in law, and, therefore, the firm could not be registered. The Appellate Tribunal, by one order, disposed of the two appeals relating to both the assessment years. Relying on Jakka Devayya and Sons v. Commissioner of Income-tax, it held that the minor could be regarded as only having been admitted to the benefits of partnership. The Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the validity of the deed. Mr. Karkhanis relies specially on sub-clause (4) which states that the partnership shall be terminated at the will of any of the partners. But this clause is a general clause usually found in partnership deeds and it cannot be said that this clause enables the minor partner to terminate the partnership itself, and in the context it only means, as far as the minor is concerned, that the guardian would be entitled to exercise his right of severance given to him by section 30 of the Partnership Act. Sub-clause (5) which enables partners to borrow money obviously has to be read along with sub-clause (16) by which only the three major partners have been designated as working partners. It seems to us that the minor has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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